ABSTRACT
Dividend policy has remained a subject of debate for a long time with no consensus reached on a wide variety of issues. Factors determining dividend payout policies differ from country to country, from industry to industry and from one firm to the other.
This study examines the “Determinants of Dividend Payout in Nigeria Quoted Banks”. The determinants considered are: liquidity, growth, leverage, profitability, firm size, and previous year dividend from 2007 to 2013. The contribution of this study is the information firms and investors will have from this work that will help them make better dividend policy decision.
This work centered on the banking industry using 15 banks listed on the Nigeria Stock Exchange (NSE). Data were collected on some of the determinants of dividend payout for seven years (2007-2013). The determinants examined were; firm size, growth, leverage, liquidity, profitability and previous year dividend. Data were collected from the bank’s annual financial report and analyzed using panel data regression technique.
The Results showed that liquidity, profitability, firm size and previous year dividend have a positive relationship with dividend payout while growth and leverage have a negative relationship with dividend payout and do not form part of the factors that determine dividend payout to shareholders.
In conclusion, this study found out that amongst the determinants of dividend payout in the Nigeria banking industry are: liquidity, firm size, profitability and the dividend paid the previous year. Growth and leverage in the capital structure do not affect the payment of dividend. It is therefore recommended that firms and investors should consider the determinants of dividend payout in their dividend policy decision.
